Staples cuts sales forecast

Although Staples Inc. is weathering the economic downturn better than rival Office Depot Inc., the world’s largest office products supplier sees no quick turnaround from sagging U.S. customer demand.

The chain of more than 2,000 stores and 76,000 employees on Tuesday trimmed its profit and sales forecasts for the full year and reported its fiscal fourth-quarter profit declined 1%.

Staples’ retail customer traffic fell 6% in the fourth quarter and “remains choppy,” Staples Chief Executive Ron Sargent said. “I feel like we’re kind of bumping along the bottom of this recession.”

Shares of the Framingham, Mass.-based retailer fell 27 cents to $22.22.

Staples earned $333.2 million, or 47 cents a share in the three months ended Feb. 2, matching the expectations of analysts surveyed by Thomson Financial. In the same quarter a year earlier, Staples’ profit was $336.5 million, or 46 cents.

Sales rose 1% to $5.32 billion -- just shy of analysts’ expectations for $5.37 billion.

Staples’ latest results were for a period with 13 weeks, one less week than in the same fiscal quarter in 2006. Using a 13-week comparison in both quarters, Staples’ per-share profit rose 15%, with sales up 8%.

Staples’ earnings came a week after Office Depot reported its fourth-quarter profit tumbled 85%.

Staples forecasts sales to grow in the mid-single digits in percentage terms in 2008, down from a forecast it offered in November for a 2008 sales growth in the high single digits.

The company expects per-share earnings to increase in the high single digits for the year, compared with the previous forecast of growth in the low teens.